I read an article by Paul Krugman describing the impacts of hyper-globalization and how that impact is largely behind us meaning continued globalization is unlikely to have the same impact as it did before in terms of seeing industries completely vanish in the United States. This suggests that from an S-Curve function perspective globalization is on a more mature phase of development considering the degree of saturation.
Initially, globalization caused many commodity-like industries to move to lower cost regions of the world because they had a comparative advantage in labor costs, some of which was unethical from a human rights perspective. That being said, this allowed the United States consumer to maintain purchasing power because those imported goods were now cheaper than what could be made domestically. This needs to be taken into consideration with the fact that wages have not increased meaningfully for consumers since the 1970’s adjusted for inflation. Although, it should be noted that the wage declines are also due to jobs transitioning overseas and workers being unable to find equal-to-or-higher paying jobs as well as a decline in workers’ bargaining power as Corporations are viewed as entities and employees have merely become invariable costs. Moreover, the hyper-globalization phase is commiserate with China’s rise to prominence.
Please see my reports on Inflation and China (ask for Password on Protected Posts):
🔺New Model: The Dynamics of and a 11 Factor Model for Inflation https://internationalcapitalmarkets.org/2019/09/09/the-dynamics-of-and-a-model-for-inflation/ via @Diamond1_CEO
🔺The 11 Factors to China’s Rise to Prominence on the World Stage https://internationalcapitalmarkets.org/2019/08/21/understanding-chinas-rise-to-prominence-on-the-world-stage/ via @Diamond1_CEO
Despite the purchasing power benefits of Globalization, the hyper-Globalization phase eviscerated jobs at such a pace whereby the ability to transition lost jobs and to retrain workers was slower than the rate at which jobs were transferring overseas to lower cost regions creating forced displacement. During this period, it would have been necessary to have a strong social safety net along with a program to transition workers into new markets/industries where such skills were transferable at equal-to-or-higher wages.
Please see my reports on Businesses as Innovations, the Use of Subsidies to Spawn New Industries and Markets, and Forced Displacement:
🔺Businesses are Innovations in and of Themselves and Job Creators https://internationalcapitalmarkets.org/2019/09/12/businesses-are-innovations-in-and-of-themselves-and-job-creators/ via @Diamond1_CEO
🔺Part 1: Subsidies should Spawn Strategic or New Industries, Not Support a Below-or-Equal to Cost/Comparative Advantage Market Price for Commodities https://internationalcapitalmarkets.org/2019/10/11/%f0%9f%94%bapart-1-subsidies-should-spawn-strategic-or-new-industries-not-support-a-below-or-equal-to-comparative-advantage-market-price-for-commodities/ via @Diamond1_CEO
🔺New Model: Impacts of Forced Displacement and Built-In Solution https://internationalcapitalmarkets.org/2019/09/03/impacts-of-forced-dispacement/ via @Diamond1_CEO
Although the pace of globalization has slowed, to me, the pace at which automation occurs could have similar dynamics of forced displacement like hyper-globalization if a hyper-automation phase were to occur. Therefore, I think it’s a useful analog to draw comparisons.
The degree and pace of automation needs to be buffered against the social safety net and the pace at which Strategic and New Industries are created whether by the emergent properties of markets or subsidies.